Demand Weakens, SHFE Zinc Declines [SMM Zinc Morning Comment]

Published: Jan 3, 2025 08:53
[SMM Zinc Morning Comment] The most-traded SHFE zinc 2502 contract opened at 24,920 yuan/mt. At the beginning of the session, SHFE zinc briefly moved upward, reaching a high of 25,040 yuan/mt. Later, as bulls reduced their positions, SHFE zinc fluctuated downward throughout the session, hitting a low of 24,780 yuan/mt near the close and ultimately settled lower at 24,800 yuan/mt, down 465 yuan or 1.84%. Trading volume decreased to 86,977 lots, and open interest fell by 6,940 lots to 124,000 lots. Overnight, SHFE zinc recorded a small bearish candlestick...

Overnight, US media reported that Biden might launch strikes before leaving office if Iran accelerates the development of nuclear facilities. An ECB Governing Council member predicted that interest rates would drop to 2% by this autumn. Elon Musk called for a re-election in the UK. South Korea's Corruption Investigation Office for High-ranking Officials issued an arrest warrant for Yoon Suk-yeol. Li Qiang emphasized the continued implementation of the trade-in policy for consumer goods. The Ministry of Commerce announced measures against 10 US companies under the unreliable entity list. Policies related to stock buybacks, increased holdings, and relending were adjusted and optimized.
Overnight, LME zinc opened at $2,992/mt. In early trading, it fluctuated near the daily moving average, briefly reaching a high of $3,020.5/mt. During European trading hours, longs exited the market, causing LME zinc to plunge downward, closing at the intraday low of $2,924/mt, down $65/mt or 2.17%. Trading volume increased to 15,006 lots, while open interest decreased by 3,247 lots to 221,000 lots. Overnight, LME zinc formed a large bearish candlestick with no lower shadow. LME zinc inventory decreased by 800 mt to 234,100 mt, a drop of 0.34%. The US dollar continued to rise, and concerns over increased tariffs dampened global demand. Additionally, global manufacturing data showed declines, weakening demand. LME zinc faced downward pressure and is expected to fluctuate downward today.
Overnight, the most-traded SHFE zinc 2502 contract opened at 24,920 yuan/mt. In early trading, SHFE zinc briefly rose to a high of 25,040 yuan/mt before longs reduced positions, causing SHFE zinc to fluctuate downward, hitting a low of 24,780 yuan/mt near the session's end. It ultimately closed at 24,800 yuan/mt, down 465 yuan or 1.84%. Trading volume decreased to 86,977 lots, while open interest fell by 6,940 lots to 124,000 lots. Overnight, SHFE zinc formed a small bearish candlestick. The middle Bollinger Band provided resistance, and the KDJ indicator showed a downward opening. Macro sentiment weakened as the US dollar continued to strengthen. Fundamentally, social inventory increased, easing the tight supply of zinc ingots. Consumption weakened as downstream enterprises gradually entered the holiday season. Dragged down by LME zinc, SHFE zinc declined and is expected to fluctuate downward today.

Data Source Statement: Except for publicly available information, all other data are processed by SMM based on publicly available information, market communication, and relying on SMM‘s internal database model. They are for reference only and do not constitute decision-making recommendations.

For any inquiries or to learn more information, please contact: lemonzhao@smm.cn
For more information on how to access our research reports, please contact:service.en@smm.cn
Related News
Zinc Ingot Inventory Continues to Accumulate, Zinc Prices Weakened During the Day [SMM Zinc Futures Brief Review]
1 hour ago
Zinc Ingot Inventory Continues to Accumulate, Zinc Prices Weakened During the Day [SMM Zinc Futures Brief Review]
Read More
Zinc Ingot Inventory Continues to Accumulate, Zinc Prices Weakened During the Day [SMM Zinc Futures Brief Review]
Zinc Ingot Inventory Continues to Accumulate, Zinc Prices Weakened During the Day [SMM Zinc Futures Brief Review]
[Zinc Ingot Inventory Continues to Accumulate, Zinc Prices Weaken During the Day]: The most-traded SHFE zinc 2603 contract opened at 24,800 yuan/mt, touched a high of 24,815 yuan/mt early in the session, then fluctuated downward throughout, approaching a low of 24,390 yuan/mt near the close, and finally settled down at 24,395 yuan/mt, falling 375 yuan/mt, a decline of 1.51%.
1 hour ago
Data: SHFE, DCE market movement (Feb 05)
3 hours ago
Data: SHFE, DCE market movement (Feb 05)
Read More
Data: SHFE, DCE market movement (Feb 05)
Data: SHFE, DCE market movement (Feb 05)
The following table shows the ferrous and nonferrous metals movement on the SHFE and DCE on 05 Feb , 2026
3 hours ago
Ivanhoe Mines in Talks to Supply Critical Minerals from DRC's Kipushi Mine to US via Gécamines, Mercuria
8 hours ago
Ivanhoe Mines in Talks to Supply Critical Minerals from DRC's Kipushi Mine to US via Gécamines, Mercuria
Read More
Ivanhoe Mines in Talks to Supply Critical Minerals from DRC's Kipushi Mine to US via Gécamines, Mercuria
Ivanhoe Mines in Talks to Supply Critical Minerals from DRC's Kipushi Mine to US via Gécamines, Mercuria
According to the release from Ivanhoe Mines on February 3, Ivanhoe Mines is engaged in in-depth discussions with Gécamines and Mercuria, planning to supply critical minerals from the ultra-high-grade Kipushi zinc-lead-germanium-gallium mine to the US. Under the proposed agreement, Mercuria's current offtake of Kipushi zinc concentrates will be allocated to the trading division of Gécamines, and the excess production resulting from the successful debottlenecking and expansion of Kipushi in Q4 2025 will also be allocated. The concentrates produced from the Kipushi mine also contain significant amounts of germanium and gallium. Gécamines has the potential to be responsible for the sales of up to 50% of the mine's concentrate production, including sales to the US.
8 hours ago